Tuesday, January 13, 2009

union confusion

Going back into my files over the Christmas break, here's a confused editorial from union leader Bruce Raynor in the C-J with my commentary...

The foreign non-union auto companies in the South have a plan to reduce wages and benefits at their factories in the United States. And to do it, they need to destroy the United Auto Workers.

Not really...How is failing to allow them to take a lot of our money equivalent to destroying them. It's as if a robber says, "You'll destroy me if you don't let me take your money."

They claimed that they couldn't support the bill without specifics about how wages would be "restructured." They didn't, however, require such specificity when it came to bailing out the financial sector....

Two wrongs don't make a right...The C-J'ers get a little of their own medicine here: disappointed at the difference between theory (in this case, twisted theory) and practice in government policy. Join the gang!

When one compares how the auto industry and the financial sector are being treated by Congress, the double standard is staggering. In the financial sector, employee compensation makes up a huge percentage of costs.

Uhhh, that's because it's a service industry with relatively low fixed/capital costs. That's Econ101 people!

According to the New York state comptroller, it accounted for more than 60 percent of 2007 revenues for the seven largest financial companies in New York.

...what the foreign car companies want is to level -- which is to say, wipe out -- the union.

Not at all. I'm sure the "big 12" love the fact that they have such a tremendous labor cost/productivity advantage over the "big 3". The labor unions act as shackles on their competitors. They have to love that!

They currently discourage their work force from organizing by paying wages comparable to the Big Three's UAW contracts. In fact, Toyota's per-hour wages are actually above UAW wages.

So, paying above-union wages-- while not forcing workers to join unions and pay dues-- that's a problem? Huh? The writer of this editorial needs to step outside and throw their crack pipe as far away as possible!

President Bush's administration is likely to keep the Big Three alive long enough for President-elect Barack Obama to construct a real solution. Democrats and even most Republicans understand that a nation that has already lost 2 million jobs this year cannot afford to put at risk 3 million more.

"A real solution"? How so? And as I covered previously, "3 million" is hyperbole borne out of ignorance, fear, or rhetorical deception.

What the economy needs now is rising wages so the country can get on the path of wage-driven consumption growth. That means stronger unions.

So, let's unionize everything-- or just raise everyone's wages. Actually, what the economy needs is lower wages. That's how you deal with a "surplus"-- here, of labor (i.e., unemployment)-- where quantity supplied exceeds quantity demanded.


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